Brazil, UAE Strengthen Strategic Partnership

Both nations are set to increase mutual investments as bilateral trade hits $4.3b in 2023

By Muzaffar Rizvi

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Sidney Leon Romeiro, Ambassador of Brazil to the UAE
Sidney Leon Romeiro, Ambassador of Brazil to the UAE

Published: Wed 26 Jun 2024, 10:50 AM

The strategic partnership between Brazil and the UAE covers multiple sectors with significant development potential and both the nations are ready to further strengthening bilateral ties in key sectors, says a diplomat.

Ambassador of Brazil to the UAE Sidney Leon Romeiro said the UAE has already consolidated itself as the first or second largest destination for Brazilian exports of goods throughout the Arab world, with total trade exceeding $4.3 billion in 2023.

“We can increase business even further by diversifying our export agenda, even in the food sector, in which we contribute to the UAE’s food security. The construction sector, furniture design, ornamental stones and the broad domain of startups, to name just a few, offer many possibilities in this context,” Romeiro told Khaleej Times during an interview.

He said the mutual investments between Brazil and the UAE are substantial and continue to grow.

Excerpts from the interview:

What key milestones or significant agreements have marked the journey of economic cooperation between Brazil and the UAE since the establishment of diplomatic ties 50 years back?

Brazil and the UAE´s relationship is a history of success. Along the past 50 years we have been building together a strong partnership that convers segments that range from trade to space exploration, energy to culture, defense to science and technology, among others. We are proud of these achievements and committed to keep ahead this journey for the next jubilee.

Brazil established its Embassy in Abu Dhabi in 1978, seven years after the UAE’s independence, a clear indication of Brazil’s commitment to foster a robust relationship with the new nation. The first significant economic agreement between the two countries was signed in 1988, in the field of trade and economic cooperation. This was an important landmark as it provided a framework for our ever growing commercial ties. Shortly after, in 1991, the UAE established its embassy in Brasília, its first in Latin America.

It was in the 2000s, however, that economic relations saw a significant boost with the negotiations and signature of several trade agreements. As a result, already in 2008, the UAE became Brazil’s second-largest trading partner in the Gulf and the third in the Middle East. In 2019, bilateral relations were elevated to the level of a “strategic partnership” reaffirming our interest in expanding the bilateral agenda in diverse fields.

President Lula da Silva’s two visits in 2023 are also significant milestones. It is not only an expression of confidence in our relations but also an indication of the strength and vitality of the political dialogue at the highest level.

Brazil´s firm support for the UAE to become a BRICS member; the invitation to the UAE to participate in G-20, during the Brazilian presidency; the outstanding coordination we have had in COP and other multilateral foruns, like in the Security Council; and finally the ongoing negotiations of a CEPA agreement shall also be praised as milestones in our 50th jubilee.

How do you see Brazil-UAE bilateral relations in next 50 years? Brazil is keen to further strengthen ties in infrastructure, AI, aviation, culture and sports. What do you say?

Brazilian and Emirati economies are complementary across various sectors. In infrastructure, there is significant potential for UAE investments in Brazil, a vast country that needs partners to explore roads, ports, airports, power plants, among others. Aviation is another area of shared interest, with companies like Embraer, Emirates, and Etihad being prominent global players. Brazil just unveiled an ambitious plan to stimulate the tourism industry and the Emirates can have an important role in this project with the experience and knowledge the country has acquired with logistics.

The UAE is a key partner in the field of AI. It is remarkable and inspiring to see how the Emirates is preparing the country – people and institutions - to cope with the challenges and opportunities presented by AI. It has become a area of special relevance for us and our countries have already agreed in advancing cooperation in this agenda. The same goes with space exploration, where we have already negotiated a MoU aiming to exchange experiences in this field.

The UAE has a rich culture and a distinctive identity that should be more familiar to the Brazilian people. Brazil, also, has a vibrant and diverse cultural landscape that has yet to be fully explored by the Emiratis. We are working with a view to strengthen our cultural ties through different cultural manifestations, such as gastronomy, dance, theater, music literature, among others.

Brazil and the UEA have two shared passions when talking about sports: football and Jiu-Jitsu. In football our partnership dates back to 1990, whem Brazilian coach Carlos Alberto Parreira led the UAE to its first World Cup. The Emiratis are huge fans of Brazilian football and God willing both our national jerseys will be in the pitch in the next world tornament. Brazilian Jiu-Jitsu has a solid presence in the Emiratis and this is a source of proud, for us. There are more than one thousand national Brazilians working in the Emirates as coaches or BJJ-related activities, a young and vibrant community deeply fond of the UAE. It is up to us to support this community and work to futhrer expand it.

The UAE is a priority partner for Brazil, especially under the framework of the country’s strategy to advance its relations with Gulf countries. What targets do you set to further strengthening bilateral ties between the two countries?

The strategic partnership between Brazil and the UAE covers multiple sectors with significant development potential. To give a few examples, it involves political activities, economic partnerships, commercial exchanges, bilateral cooperation in areas as diverse as science, technology and innovation; actions to combat climate change and cultural activities.

Another promising area for strengthening bilateral ties involves investments for the energy transition, given the synergies between the two countries and the fact that Brazil is one of the countries with the cleanest energy matrix in the world, which needs to receive investments in this area. Mubadala is already developing an important project involving biofuels in Brazil, and this is just the beginning of what we can develop together.

The two countries have signed a wide range of agreements and Memorandums of Understanding in the areas of defence, trade, customs, technology and innovation, and preserving biodiversity since the establishment of a joint consultations committee that first met in July 2018. Please share some details.

The Joint Committee for Economic, Commercial, Industrial, Technological, and Financial Cooperation has convened three times since its inception and is expected to meet again in November this year, coinciding with the anticipated visit of the UAE President to Brazil for the G20 Summit. Each meeting of the Joint Committee offers Brazil and the UAE an opportunity to review key aspects of their relationship and outline plans for the future.

In recent years, even before the launch of the Joint Committee, cooperation between Brazil and the UAE has significantly expanded through the signing of several agreements in various crucial areas. In the field of defence, Brazil and the UAE signed a Defence Cooperation Agreement in 2014, with the Joint Committee serving as a forum to further discuss topics in this area. Economically, the Agreements on the Prevention of Fiscal Evasion (2018), Investment Facilitation (2019), and Customs Cooperation (2019) are currently in force. These agreements demonstrate the positive willingness of both countries to strengthen trade and investment ties.

In a previous discussion, I mentioned science, technology, and innovation as a privileged axis of cooperation for the next 50 years. In line with this, a memorandum of understanding for Cooperation in Artificial Intelligence was signed in October 2019. Among other provisions, the memorandum establishes a Working Group for Cooperation in AI, responsible for planning activities and creating a work program in this field.

Regarding environmental protection, in April of last year, during President Lula da Silva’s visit to the UAE, a Joint Declaration on Enhanced Action and Ambition on Climate Change was published, highlighting the shared values of sustainability and environmental protection between our countries. Additionally, Brazil, the UAE, and Azerbaijan launched an unprecedented troika in February this year to implement the COP28 agreement and ensure more ambitious commitments in the new Nationally Determined Contributions (NDCs).

Can you highlight any notable success stories or flagship collaborative ventures between Brazil and Emirati businesses in the past 50 years?

The UAE´s concern for food security is doubtless a segment that hightlight how our trade relations are intertwined. For this, I would mention the food sector as one of the main areas of cooperation. In 2014, Brasil Foods (BRF) inaugurated a state-of-the-art food processing plant in the Khalifa Industrial Zone. This strategic location offers the company significant logistical advantages and access to global markets through Khalifa Port. The plant required an investment of approximately $160 million and employs nearly 800 people, with a production capacity of 100,000 tonnes of food per year.

On the Emirati side, I highlight the country´s concern for sustainable energy as a flaghip venture for investments in Brasil. Last year, during President Lula´s official visit to Abu Dhabi, Mubada Capital signed a MoU where the Fund commits to invest $2.5 billion in the next 10 years to produce renewable diesel and sustainable aviation kerosene in the north-eastern state of Bahia. During the first stage of the project, Acelen, the Brazilian subsidiary company, will use soybean oil and other raw materials. In the second stage, expected to begin in 2025, the company will use palm oil and macauba oil, a native Brazilian tree oil with high energy potential that has yet to be fully explored on a commercial scale. Overall, an areaof 200,000 hectares will be planted, the equivalent of 280,000 football pitches.

Port of Santos, Sao Paulo, Brazil.
Port of Santos, Sao Paulo, Brazil.

In what specific sectors have Brazilian companies found the most opportunities for collaboration and investment within the UAE market, and vice versa?

Brazil has almost 40 companies now operating in the Emirates: Vale (steel), Embraer (aircraft), WEG (electric machinery), Marcopolo (buses), JBS (chicken, beef, and food products), and Tramontina (household utensils), among others. They participate in major government projects or partnerships with local companies to develop and produce goods serving the local population. These large global companies, along with numerous small and medium-sized Brazilian enterprises – like those in the design and furniture industry, wholesale and education activities — have significantly contributed to the UAE economy.

Regarding UAE investments in Brazil, a notable example is the recent acquisition of 51 per cent of the Brazilian company Condor by the UAE group Edge. Condor is one of the world’s leading producers of non-lethal weapons, specially for the public security segment. R&D in areas like this demands huge investments with a view to develop new technologies and mantain the quality standards of the company. This is what motivates Edge to be a partner of Condor. Edge’s objective with this acquisition is to expand its market share in non-lethal technologies and enter strategic markets such as the United States.

Additionally, several UAE sovereign funds have invested in Brazil, with an estimated total investment exceeding $10 billion. The Emirati fund with the highest value of investments in Brazil is Mubadala. Mubadala currently holds significant stakes in Porto de Açu in Rio de Janeiro and the Mataripe Refinery in Bahia. In November 2021, Mubadala, through the holding company Hmobi, took control of the Rio de Janeiro Metro. Furthermore, in 2018, Yahsat, a satellite company of the Mubadala group, opened an office in Rio de Janeiro to manage the sale of the Yahsat 3 satellite signal, launched in January 2018.

The mutual investments between Brazil and the UAE are substantial and continue to grow. Recently I have been contacted by Brazilian businesspeople from sectors as diverse as real state and fintech, where I am consulted about the prospects for Brazilian investments in the Emirates. With our economies fully stabilised, enduring growth rates and a less bureaucreatic environment, I am confident we will watch more Brazilian companies coming to the UAE and more Emiratis investments heading to Brazil.

How has the Brazilian government actively supported and facilitated business activities and partnerships between Brazilian businesses and the UAE counterparts throughout this bilateral relationship?

Brazil mantains a significant network of government agencies in the UAE that support companies wishing to invest or conduct business here. ApexBrasil (Brazilian Trade and Investment Promotion Agency), for instance, has a permanent office in Dubai, assisting Brazilian companies in conducting business in the UAE and participating in exhibitions and events across the country. INVEST-SP, an agency of São Paulo’s government, Brazil’s wealthiest state, has been operating in Dubai since 2020 with a view to assisting Emirati companies interested in investing in São Paulo. Non-profit private organisations also play a crucial role in supporting Brazilian and Emirati businesses. In February 2019, the Arab-Brazilian Chamber of Commerce (CCAB) opened a representative office in Dubai, offering a range of services to small, medium, and large companies from both countries. In 2021, coinciding with Expo 2020, the National Agriculture Confederation (CNA) established an office in Dubai, serving as a key contact point for Brazilian agricultural companies seeking to access the UAE market.

The Brazilian Embassy, through its Commercial Sector, is also dedicated to assistinging companies from both Brazil and the UAE in their efforts to expand markets. Personally, I aim to participate in all events involving Brazilian and Emirati companies interested in investing in Brazil. In my interactions with entrepreneurs from both countries, I always highlight the enormous potential for expanding bilateral trade and investment. The opportunities on both sides are evident, and the potential returns are substantial. Brazil and the UAE are currently in an optimal position to deepen their political and economic ties.

Port of Santos, Sao Paulo, Brazil.
Port of Santos, Sao Paulo, Brazil.

From your perspective, what have been the major drivers behind the strengthening of economic ties between Brazil and the UAE?

Trust between our business communities has grown steadly and consistenly. Today, there is a clear awareness, in both public and private spheres, that our countries have robust economies, with a key role in our regions and a strong international presence, offering expressive investment opportunities. Four Brazilian presidential visits over the past five years have provided broad visibility for our partnership and energised the business environment in both coutries.

We have worked hard to also create a legal framework that provide more legal certainty for business and simultaneouly attract more businesses initiatives. The Agreement to avoid double taxation and the Agreement for Faciliation of Investments are legal instruments that have had a significant impact in the business sector and is a clear example how the public and private sector can work together to enhance confidence and trust.

The negotiations of a Cepa between Mercosul and the UAE will certainly open new opportunities for our businesspeople. Companies in both sides will benefit for reduced-cost products, a more fluid trade relation and a deregulated scenario for a comprehensive list of itens.

Yet, there is still much to do. We need na effective and dynamic Business Council that can gather representantive business leaders in different segments from both countries. The Council will not only have the role of an important networking platform, but also work as a catalyst of the needs and demands of our businesspeople, conveying them to the relevant public actors. We need to organize this public-private dialogue in the business sector with a view to instill more confidence and motivation.

The two countries agreed on a MoU outlining a transition plan between COP28 and COP30, set to take place in 2025 in the Amazonian city of Belém, in Northern Brazil. What do you say?

As mentioned before, the partnership between Brazil and the UAE was very successful during COP-28, and we jointly decided to extend it until COP-30, under the presidency of Brazil, also involving Azerbaijan, host of COP-29, working together in what we call “Mission 1.5”.

Inspired by a Brazilian proposal taken to COP-28, “Mission 1.5” has been enshrined in the Global Stocktake of the Paris Agreement, which was the focus of work in Dubai. Its purpose is to significantly strengthen international cooperation, with a view to stimulating action and implementing “nationally determined contributions” throughout this decade, thus keeping the 1.5o Celsius target achievable.

Brazil is, therefore, committed to implementing the “UAE Consensus” reached in 2023, and, together with its partners across the world, will seek to expand the concept of climate action with a view to also include the means of implementation, crucial in order to enable the achievement of the 1.5o Celsius objective.

Furthermore a memorandum was signed between the Emirati presidency and the Government of the State of Pará during COP-28, where COP-30 will take place. This agreement establishes the basis for cooperation involving the two entities.

Brazil, which holds the G20 Presidency, is working to invite the UAE to participate in the bloc’s summit in 2024. Could you please share some details?

In its capacity as President of the G20, Brazil has had the opportunity to invite some of our friendly countries to take part in the work and discussions around our priorities in that forum. These priorities are social inclusion and the fight against hunger and poverty; the promotion of sustainable development in its social, economic and environmental dimensions and energy transitions; and the reform of global governance institutions.

The UAE is part of this effort, through its participation in working groups and technical and ministerial meetings. The product of this work, developed collectively throughout 2024, will culminate in the summit meeting in November this year, in Rio de Janeiro. We hope to have the presence of the President of the UAE on this occasion, which will also mark the first visit by a head of state from this country to Brazil. We look forward to receiving His Highness the President in Brazil.

Brazil and the UAE have both young, creative and dynamic populations. In many fields we share the same challenges and also resort to the same tools to find solutions. Both in times of prosperity and in times of trouble. The humanitarian assistance generously provided by The UAE President Sheikh Mohamed bin Zayed Al Nahyan to the areas flooded in Southern Brazil two months ago is a gesture we will never forget and this speaks volumes about the level of our friendship. We have developed strong bonds of empathy, respect and admiration. This is the foundation of our past Jubilee. This is what motivate us to keep this history of success for the next 50 years. And, God willing, beyond.

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